Sources: Uri Ariel, Naftali Bennett at Odds Over VAT Plan

Sources close to Uri Ariel said that he would support the plan to exempt home buyers from VAT payments only if it applied to all.

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Yaakov Levi, 24/03/14 21:08

Housing Minister Uri Ariel in Itamar

Yoni Kempinski

Sources close to Housing Minister Uri Ariel said that he would object to any attempt by Finance Minister Yair Lapid to require IDF army service of a family member as a criteria for qualifying for the proposed value-added tax (VAT) exemption for first-time homebuyers. Speaking to Arutz Sheva, the sources said that Ariel was waiting for a legal opinion on the legitimacy of Lapid's proposal.

Lapid proposed the plan last week as a way to reduce the cost of homes for young families. According to the plan, first-time homebuyers would save 18% (the amount of VAT) on homes, which they would be prohibited from selling for five years. Ariel said that he would support a proposal by Finance Minister Yair Lapid to eliminate the value-added tax (VAT) for first-time apartment buyers, providing the discount was given to all home-buyers, including hareidi and Arab Israelis.

According to legal experts, it is not clear if a condition that would provide the benefit only to families who have a member who served in the army would stand up to examination by the High Court. In the past, National Insurance child allowance payments were given only to families who had a member serving in the IDF, or who had received exemptions from service. Arab and leftist groups sued, and after several decisions by the High Court in the mid-1990s, the government eliminated the requirement

It should be noted that Naftali Bennett, Chairman of Jewish Home, has not yet stated his thoughts on the matter. However, sources close to both said that he does not necessarily agree with Ariel on this issue.